At a time when Internet companies and various software applications are all rage in global financial circles for disrupting merchandising and entertainment, it’s the mobile which connects people across the world. Xiaomi leads the worldwide revolution that is putting powerful digital communication equipment affordably in billions of hands. And the master brain behind this super smart technology is Mr. Lei Jun, a Chinese billionaire entrepreneur who founded Xiaomi Inc, one of the largest mobile phone makers in the world. Currently, with an estimated net worth of $13.3 Billion, Lei acts as the CEO and Chairman of the of the $45 billion valuation company.
Xiaomi:
Xiaomi (“small rice” in Mandarin Chinese) Corporation is a Chinese electronics company headquartered in Beijing. It makes and invests in smartphones, mobile apps, laptops, and related consumer electronics. The company has created a diverse portfolio of products, ranging from phones, tablets, TVs, routers, power banks, and earphones, to air and water purifiers and even robot vacuums and scooters. It is the world’s 4th most valuable technology start-up. Cofounders include Lin Bin, Vice President of the Google China Institute of Engineering, Dr. Zhou Guangping, Senior Director of the Motorola Beijing R&D center, YanJiahui, Department Head of Industrial Design at the University of Science and Technology Beijing, Li Wanqiang, General Manager of Kingsoft Dictionary; Wong Kong-Kat, Principal Development Manager; and Hong Feng, Senior Product Manager for Google China. Xiaomi has gone on to become largely famous amongst the masses globally, due to its high power phones which are on par with Samsung and Apple, yet are available at really low prices. With more than 8,000 employees and revenues worth $12 Billion (2014), Xiaomi mainly holds a presence in Mainland China, Malaysia, and Singapore, and is also seen to be aggressively expanding to other countries like India, Indonesia, Philippines and Brazil.
The Rise of an Empire:
Mr Lei Jun, who rose literally from scratch, obviously had a whole book of struggles that he faced in his early days. His childhood days were passed near a rough industrial city in central China. Lei graduated from Mianyang Middle School and began attending Wuhan University, and graduated with a BA in Computer Science. He also started his first company during his last year in college. During his time at the university, he happened to read the book about Mr Steve Jobs and wished to become like him someday. He was highly mesmerised by the book and wanted to establish his own business that would be first class. Hence, to achieve this dream, he decided to get through college fast.
After completing his studies, Mr Jun began working at Kingsoft, a Chinese software company (a start-up then) as an Engineer in 1992. Kingsoft is a company that does word processing (just like MS Word), antivirus software, gaming distribution, and even e-commerce.With his sheer skills and talent, in a matter of no time, the man managed to rise up the ladder quickly, becoming the President and CEO of the company and leading it towards an IPO in 1998. While he was at it, he had also founded Joyo.com, an online bookstore in 2000 as well. His talent was such that, in just a matter of four years, he grew his bookstore so great that it was bought by Amazon.com $75 million in 2004. Around the early 2000s, Lei went on to invest in many successful start-up companies like YY, UC and Vancl and oversaw a total of over 70 funding rounds for his portfolio companies as well.
After spending 16 years with the software maker, Lei on account of “health reasons” resigned from the position of the President and CEO of Kingsoft. But soon after that, it was announced that he had invested an (X) amount in Vancl.com and UCWeb, subsequent to which, he also became the Chairman of UCWeb as well in 2008. UCWeb is a browser that now has over 500 million users and has been recently acquired by Alibaba.
After two years, in an attempt to fulfil his dream of getting into the fast-growing Mobile space, Lei founded Xiaomi Inc. in April 2010. In 2011, he rejoined Kingsoft as Chairman. In 2013, Lei Jun was appointed as the delegate of the National People’s Congress.
Impact on Indian Markets:
After the huge success of Xiaomi in other countries, Lei Jun decided to spread his technological web in India. Indian market and the consumers accepted Xiaomi wholeheartedly. Around the mid of 2014, Xiaomi entered the vast untapped market of Indian. He entered the market by exclusively tying up with India’s largest E-commerce site – Flipkart. Their impact in India was such that, they were sold out in the first 24 seconds itself. They sold 40,000 smartphones in total. That is when the company decided to expand rapidly in India and eventually also partnered with other E-commerce leaders like Amazon.com and Snapdeal as well.
The Marketing Strategies:
Lei Jun adopts strategic marketing techniques for effective business growth.
• Smart Applications and High-Quality products:
The phone-related peripheral devices, smart home gadgetry, apps, online videos, themes, etc. attracts customers and serves as a highlight to their business.
• Cost Effective:
In selling a smartphone, Xiaomi uses a unique strategy that unlike the market trend. The company has set the prices of their phones nearly at the cost price, that too without compromising the quality and performance. And to make a profit from this narrow margin, the company sells their model for up to 18 months.
• Online Marketing:
To further reduce their costs, Mr Lei Jun uses the online medium exclusively to sell his products. The company offers limited availability flash sales which make sure that supply never crosses the demand, and keeps the market buzz on an all-time high.
• Word of Mouth Advertising:
Lei Jun has also given away with the old traditional marketing or advertising techniques and relies mainly on social networking services along with its own customers to help advertise its products a.k.a. Word of Mouth.
• Feedback:
Customer satisfaction and loyalty is a crucial factor that determines the company’s financial performance. To build and maintain their strong and loyal customer base, Lei Jun and his team make sure to listen closely to their customer’s feedback. He calls this process as “Design as you Build”.
‘Steve Jobs’ of China:
Mr Lei is often referred to as the ‘Steve Jobs’ of China due to his world-changing technological innovations. He has a presentation style that calls to mind Steve Jobs; the dash of ‘Patriotism’. Asked to describe the corporate mission, Lei chooses an elevated expression from Japanese cartoons. “Our journey is the ocean of stars,” he says. “It signifies us. What we’re thinking about isn’t just little, little things. My goal is to turn Xiaomi into a national brand in China, influence all of China’s industry and benefit everyone in the world”.
Lei has also managed to successfully dominate the software markets, with the creation of the most popular Android custom ROMs Worldwide. Part of his inspiration for Xiaomi’s business model is Wal-Mart’s driving down of retail costs around the U.S. He adds another goal to his huge valuation target, that is to lead the world in smartphones in five to ten years.
The culture of Technology in India:
In the market landscape of India, International brands are successful in becoming significant contributors. Following the trends of International markets, Indian consumers are transforming as global buyers. Mr Lei Jun says that international products can really accelerate India’s creativity and innovation. Xiaomi Corporation has some great innovations from the Indian market, and their global leads visit India for updates and feedback.
Mr Jun believes that if one wants to sell the products affordable, he needs to use the technology of the Internet and e-commerce to do retail. The first example is Mi Home. In India, they now have ten of them with huge footfalls and each store selling a huge number of phones. The first store in India sold 20,000 phones a month, it is a big miracle in the retail industry. The company is also planning to build an incubator in India and work with more Indian startups to help them succeed. So far, they have invested in six Indian startups and collaborates with them for the latest technological updates.
Benefits from the ‘Make in India Campaign’:
Lei Jun believes that technological innovation is always step-by-step and one should not set up a too ambitious goal in the very beginning. In his opinion, India’s education system is actually very good. Indians are super strong on the technology front and needs to take a step-by-step approach to develop the manufacturing industry. Two decades ago China also followed the same step-by-step approach – start with assembly and slowly go to the localisation of components. Lei believes, Indian Prime Minister Modi’s ‘Make in India’ campaign is a visionary project that will improve India’s industrial capabilities, solve employment issue and develop the economy, and this will help him in expanding his business in India. For this purpose, he looks forward to setting up of factories in India. He also considers setting up a Bangalore R&D centre to design products only for India.
A Great Humanitarian:
Not all heroes wear capes, and that rings true for Xiaomi’s CEO Lei Jun. He is an extremely ambitious billionaire with the heart of improving the lives of millions. In 2017, Mr Lei Jun was recognised as one of China’s Top 10 Philanthropists. He was applauded for his service to humanity at the 14th China Charity List Award, and the sum of his recorded donations was put at $1 billion. His act of philanthropy started with his Alma Mater, Wuhan University where he finished from in 1991. Six years after graduating, he made his first donation to the school, a sum of ¥140,000 which was used to set up a scholarship. He later started two other scholarships, the Lei Jun Computer Scholarship and the Lei Jun Scholarship. Asides the donations to his Alma Mater, he also donates to a lot of charity organisations. In May of 2016, he donated ¥200,000 ($29,000) to Zhuhai Charity, an organisation that funds schools for migrants. Last December, he also donated ¥100,000 to the villagers of Yangchun for the renovation of schools and mud-brick houses and construction of cultural buildings. His cash has also found its way to victims of natural disasters like the April 20th, 2013 earthquake that occurred in Ya’an which saw him donate ¥1 million for the purchase of relief materials. He also replicated the same on August 3, 2014, when a 6.5 magnitude earthquake occurred in Ludian County, Yunnan Province. The following day, he donated NT$1 million to aid victims of a gas explosion in Kaohsiung, Taiwan. Mr Lei Jun also participated in the American ALS Association’s Ice Bucket Challenge in 2014 and also donated $10,000 to the ALS project in China. His donations have changed the lives of many and we are sure those people see him as a hero.
Humble Billionaire:
Mr. Lei Jun is deemed to be a workaholic who consistently puts in 100-hour weeks. He also seems to be a good sportsman. With a net worth of $9.9 billion, Lei had now become the 8th richest person in China. Despite being rich, Mr. Lei remains to be grounded and humble. There has been an incident where a son of the wealthiest man in China mocked Lei Jun for his terrible English when he gave a brief speech for XiaoMi’s conference in India. Mr. Lei never took others’ taunts to heart and later apologised for embarrassing his alma mater – Wu Han University on the global stage. He was glad that his “terrible English” brought a smile to millions of people across India and China.
Recognitions:
Mr. Lei Jun’s business activities have been recognised through multiple industry awards.
• In 2012, he was selected by China Central Television as one of the top 10 business leaders of the year.
• In 2013, he was named one of the 11 most powerful business people in Asia by Fortune as well as most notable entrepreneur by BAZAAR Men’s Style.
• In 2014, Mr. Jun was named as the Businessman of The Year by Forbes Asia.
• In 2015, Asia Society honoured Mr. Lei Jun with an Asia Game Changer award in a ceremony at the United Nations for changing the game of communication in China.
• He was awarded the prestigious Top 10 Economic People of The Year 2017 award.
• In June 2018, Xiaomi gifted a $1.5 billion bonus to Mr. Lei— one of the largest CEO bonuses in history, as a reward to him for his contributions.